Valeant Gets Default Notice Due to Quarterly Filing Delay

  • Drugmaker says it will file Form 10-Q on or before June 10
  • Default notice doesn’t trigger accelerated debt payments

Valeant Pharmaceuticals International Inc. received a notice of default from some bondholders because of the delay in filing its quarterly financial results with regulators.

The company got the notice on June 2, and has 60 days to file its statement for the three months ended March 31 with the U.S. Securities and Exchange Commission, it said in a press release on Friday. Valeant, which received similar notices from other bondholders last month, reiterated that it expects to make the submission on or before June 10.

The notice of default “does not result in the acceleration of any indebtedness of Valeant or any of its subsidiaries,” according to the statement. Valeant disclosed in a May 10 filing that it wouldn’t be able to submit its first-quarter report on time “without unreasonable effort or expense” because it was focused on restating prior financial statements going back to 2014.

Creditors can demand their money back as early as 60 days after the company has failed to live up to the terms of its agreements, according to Valeant’s 2015 annual report. Bondholders can’t send a default notice to start the clock on those 60 days until a covenant is breached.

In its pact with bondholders, Valeant agreed to file quarterly and annual reports “within the time periods specified” in the SEC’s rules and regulations. For the Laval, Quebec-based company, that means the first-quarter report was supposed to be in by May 10, or within 40 days of quarter-end.

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